Cameron reported net income of $166.3 million, or $0.73 per diluted share, for the quarter ended September 30, 2008, compared with net income of $150.7 million, or $0.65 per diluted share, for the third quarter of 2007. The third quarter 2007 results included a gain of $19.8 million, or $0.09 per share, related to the favorable resolution of certain tax matters. Excluding that gain, the Company's earnings were $0.56 per diluted share for the third quarter of 2007.
Total revenues were $1,504.7 million for the quarter, up 27 percent from 2007's $1,186.2 million, while income before income taxes was $247.4 million, up 24 percent from the $198.9 million of a year ago. Cameron President and Chief Executive Officer Jack B. Moore noted that the year-over-year increases reflect double-digit earnings increases in all three business groups, led by the longer-cycle drilling and subsea businesses.
Record Orders in Subsea and Drilling Businesses Drive Backlog to New High
Orders received during the third quarter of 2008 totaled $2,611.8 million, almost double (up 97 percent) the $1,329.0 million of a year ago, driven primarily by continued strength in the drilling and subsea markets.
"The $850 million booking for the initial phase of BP's Block 31 development offshore West Africa marked the largest single order in Cameron's history, and resulted in subsea orders totaling nearly $1 billion in the quarter. This, coupled with a record level of drilling orders, resulted in Drilling & Production Systems (DPS) posting the highest quarterly orders in its history at $1.95 billion," Moore said. "In addition, Valves & Measurement (V&M) recorded its highest orders quarter to date, with each of its business lines reaching new highs." Moore said
At September 30, 2008, the Company's backlog totaled $6.15 billion, up 18 percent from the $5.22 billion level at the end of the second quarter, and up 49 percent from the year-ago level of $4.13 billion.
Cash Flow Reinvested in New Facilities, Acquisitions, Share Repurchases
Moore said that Cameron's cash flow from operations totaled $512.7 million through the first nine months of 2008, compared with $167.6 million for the same period of 2007. "Year-to-date capital expenditures total
"We will have spent approximately $40 million this year on our new Romanian surface equipment plant, which should begin operations before year-end, and we will invest about $14 million this year on the continuing expansion of our subsea facility in Malaysia."
Moore also noted that through the end of the third quarter, the Company had spent approximately $98 million on acquisitions and expects to close the $85 million purchase of KB Industries, a blowout preventer manufacturer, during the fourth quarter. In addition, Moore said that Cameron repurchased 1.4 million shares of its common stock during the quarter at an average price of $43.86 per share, and has spent more than $215 million on share repurchases through the first nine months of the year.
Moore said that Cameron's financial health remains solid. "At September 30, 2008, the cash and cash equivalents on our balance sheet totaled more than $1.43 billion, and exceeded our total debt by $24.2 million," he said. "With this cash on hand, amounts available under our revolver and our expected strong level of future operating cash flow, we will be able to take advantage of opportunities in this uncertain environment."
"Based on our current backlog and activity levels, we expect Cameron's earnings for the fourth quarter of 2008 to be in the range of $0.74 to $0.76 per share, which would result in full-year earnings of approximately $2.67 to $2.69 per share," Moore said. "The primary factors affecting these expectations will be our customers' spending, particularly on our shorter-cycle product lines, and our ability to execute on current project business
Moore noted that the above figures do not include an expected charge of approximately $0.09 per share related to the completion of the previously announced termination of the Company's U.S. pension plans. "This non-cash, pre-tax charge of approximately $31.0 million will represent the final settlement of the Company's pension obligations under our U.S. plans," Moore said.
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